Tesla’s problems continue with latest recall of thousands of Cybertrucks
In another setback for Elon Musk and his company Tesla, the company announced a pair of recalls for thousands of Cybertrucks on Tuesday, June 25. The problems involve windshield wipers and a trim piece.
The first recall is to address issues with windshield wiper blades that reportedly stopped working on 11,688 vehicles. Tesla said it was notified by the U.S. National Highway Traffic Safety Administration of the problem. The blades’ motor reportedly stops because of too much electrical current flowing to it. Tesla said that it will fix the problem at no cost to the owner and that they will be notified by Aug. 18.
The other recall is to address a problem with a trim piece along the truck’s bed that could possibly come loose and fly off the vehicle and into the road, creating a hazard for other drivers. This problem impacts 11,383 vehicles. Tesla said that the trim was improperly installed at its factory, and it will fix the issue free of charge to the owner of the vehicle. Impacted owners can also expect a notification to be sent to them by Aug. 18.
This is the fourth round of recalls for Tesla since its release of the Cybertruck on Nov. 13. The latest issues come on the heels of a recent recall of nearly 4,000 vehicles to address a problem with the truck’s acceleration pedal potentially becoming stuck.
Analysts have noted that this is the first time the public has learned how many Cybertrucks have been sold since Nov. 13 — something the company has been secretive about in the past.
The data shows that the numbers are a far cry from the reported 2 million orders Tesla has received to date for the hyped pickup.
Tesla shareholders side with Elon Musk. Here’s why it won’t erase legal woes
Elon Musk lassoed victory in Texas on Thursday, June 13. Tesla shareholders overwhelmingly approved his pay package for the second time and voted to approve the company relocating its incorporation from Delaware to Texas.
Tesla officially announced the results at Thursday’s shareholder meeting but Musk jumped the gun nearly a full day early, posting preliminary numbers on his other company’s site, X.
Because of the posts and Tesla’s subsequent stock surge, Tesla issued a regulatory filing with the Securities and Exchange Commission. The filing simply includes Musk’s X posts.
However, experts said the shareholder votes only make the legal issues around Tesla more complicated. It does not mean Musk can walk away with his contested pay package, which shareholders have twice approved.
How did Tesla and Musk get to this point?
It all started when a Tesla shareholder sued over Musk’s pay package, which was worth around $56 billion at the time a Delaware judge struck it down. Tesla is, at least for now, incorporated in Delaware, as are the vast majority of Fortune 500 companies.
“The judge’s concern was that the disclosure to the shareholders about this package was inadequate; that there are serious flaws, she felt, in the process; the independence of the directors; how the thing came together,” Charles Elson, a renowned expert in corporate governance in Delaware, said. “And she felt that, obviously, had disclosure been more accurate, that the shareholders may not have approved it.”
Straight Arrow News spoke with Elson about Musk’s compensation issues after Musk blamed the state of Delaware for the blow to his pocketbook and warned other companies to stay far away.
“Simply because a CEO is upset at a ruling against him in a neutral court, Delaware, is not a reason to reincorporate, period,” Elson said.
But that is what Musk set out to do, squaring in on Texas, where Tesla is headquartered. The state is also forming a business court system of its own to challenge Delaware’s reign as America’s corporate home.
“I think it would be rather insulting to Texas judges to suggest that they would have done something differently had they found the same facts,” Elson said. “You can’t go forum shopping, if you will, for a friendly judge, or if you do, it’s not the right thing to do.”
How does latest shareholder vote affect existing legal challenges?
Even if Tesla successfully reincorporates in Texas, that does not mean his current legal woes move with it. Tesla already vowed to keep the Delaware issue in Delaware, where Musk is appealing the original compensation decision.
“Originally, the only question on appeal was whether [the judge’s] original findings regarding 2018 were correct,” Tulane law professor Ann Lipton told SAN in an email. “Now, we have this new vote, with uncertain legal effect. [Judge] McCormick will decide it in the first instance: she’ll either say it cures the problem and the package is restored, or that it doesn’t. Whichever she decides, the loser will appeal.”
That makes Thursday’s victories more like moral victories for Musk. There is no guarantee the courts will approve his pay.
That pay package is worth considerably less than when the Delaware judge struck it down, too. Tesla’s share price is down more than 26% in 2024, bringing Musk’s pay package value down about $10 billion.
EU announces tariff hike on Chinese EVs amid ongoing anti-subsidy investigation
The European Union is taking steps to support its domestic automakers who are struggling with competition from China’s low-cost electric vehicles (EVs). In an effort to help the continent’s car companies compete, the EU has announced tariff increases of up to 38% on imported Chinese EVs.
“The influx of subsidized Chinese imports at artificially low prices therefore presents a threat of clearly foreseeable and imminent injury to EU industry,” the European Commission said in a statement.
This tariff hike follows the launch of an ongoing anti-subsidy investigation by the European Commission into Chinese EV prices.
Investigators aim to determine whether the prices have been artificially lowered due to financial assistance from Beijing. Companies cooperating with the probe will face a 21% tariff, while those that do not comply will be subjected to the full 38% duty.
The new tariffs will impose billions of dollars in additional costs on Chinese car manufacturers. Western automakers — such as Tesla and BMW, which produce EVs in China — will also be affected by these increased tariffs.
Beijing has criticized the EU’s decision, warning that it could harm relations between Europe and China and threaten the stability of the global automotive supply chain. China’s Ministry of Commerce accused the bloc of “creating and escalating trade tensions” with this move.
Following the tariff announcement, shares of some leading European car manufacturers fell, reflecting fears of potential retaliatory actions from China.
Despite the EU’s measures, car companies in China remain optimistic. The Chinese Passenger Car Association stated that the tariff hike was anticipated and also predicted it would not significantly impact their automakers. The industry group still foresees considerable growth potential for Chinese-made EVs in the European market.
Tesla board chair says Musk could step back if $56B pay package isn’t approved
Tesla CEO Elon Musk’s contentious $56 billion pay plan is up for a vote on June 13. With advocates both supporting and opposing the plan making their voices heard, it raises a crucial question: Is Musk’s leadership vital to Tesla’s future? Board Chair Robyn Denholm believes it is.
“The ratification of the pay package is really about fairness, fairness to our CEO,” Denholm said. “If you look at what’s happened at the company over the last six years, tremendous value creation — and he’s led that. Obviously, the Tesla team has been instrumental in it, but if you sit back, shareholders have benefited tremendously. Up to $730 billion of value creation. Employees have benefited tremendously; they’re all shareholders in the company, so their stock has risen. Customers have been benefited. The only person not paid is the leader of the company, Elon.”
Denholm is urging company shareholders to green light the package after it was voided by a Delaware judge in January, warning that it could lead the carmaker’s CEO to explore opportunities elsewhere.
“One thing Elon most certainly does not have is unlimited time,” Denholm said. “Nor does he face any shortage of ideas and other places he can make an incredible difference in the world. We want those ideas, that energy, and that time to be at Tesla, for the benefit of you, our owners. But that requires reciprocal respect.”
Despite some firms advising against the package, early votes show significant support for Musk.
“The first is obviously Elon needs to stop, you know, being on Twitter every day and start running Tesla,” Gerber said. “If you look at his tweets, he basically spends no time talking about Tesla at all. It’s not even in his thought process. And so the fact that he’s CEO of the company is part of the problem. Now I’d like to have Elon back as a full-time CEO of Tesla, but if he’s not willing to do it, it’s time for Tesla to move on. Secondly, Tesla needs a marketing program, equivalent to any other major company like Apple, and they need to spend money, and they need to be aggressive.”
While Gerber agrees with Denholm on Musk’s leadership prowess, he said the board always has the billionaire’s best interest in mind.
“There is no Tesla board in my mind,” Gerber said. “The Tesla board is like the five fingers of Elon, you know, so essentially, nobody represents Tesla shareholders. They all represent Elon, and there is no Tesla board essentially. Because what he says goes and they all live in fear of Elon.”
Musk’s compensation package was originally laid out in 2018 and required Tesla to meet ambitious targets for Musk to earn stock options. Each achievement of these targets would grant Musk stock equal to 1% of Tesla’s outstanding shares at the time.
By 2023, Tesla claimed it had met all 12 milestones.
However, since the package was struck down, Musk suggested he might divert more attention away from Tesla to focus on his other ventures.
I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.
Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand…
In a January post on X, Musk expressed discomfort with expanding Tesla’s AI and robotics efforts without having 25% control of the company’s votes. He currently holds about 13%.
Musk has been at the helm of Tesla for the past 16 years, taking over as CEO in 2008 when the company was on the brink of bankruptcy. Since then, he has transformed it into the world’s leading electric vehicle company, now valued at $569 billion.
Musk’s fortune is valued at $203 billion, making him the world’s third wealthiest person.
New Texas Stock Exchange takes on New York in stock market showdown
Texas is two-stepping on New York City’s territory with plans to open a competing stock exchange. TXSE Group announced Wednesday, June 5, that it raised $120 million in capital to start the Texas Stock Exchange. Financial heavyweights BlackRock and Citadel Securities backed the exchange.
Few buildings in New York are more iconic than the New York Stock Exchange, which is the largest stock exchange in the world by market capitalization and trading volume. Next in line is the Nasdaq, also headquartered in New York City. Texas wants to take them both on.
“TXSE will ultimately create more competition around quote activity, liquidity and transparency,” James Lee, founder and CEO of TXSE Group, said.
The Texas Stock Exchange would be a fully electronic, national securities exchange. The group said it plans to file registration documents with the U.S. Securities and Exchange Commission later this year.
A stock exchange is simply a marketplace where stock buyers connect with sellers. When a company goes public, it chooses what exchange to list with. But to get accepted at a particular exchange, the company has to follow the rules of that exchange and pay fees.
The Wall Street Journal said the proposed Texas Stock Exchange is “aiming to tap in to disaffection with increasing compliance costs at Nasdaq and NYSE and newer rules like one setting targets for board diversity at Nasdaq.”
TXSE Group said it believes it will be the most well-capitalized exchange entrant to file registration with the SEC. There used to be more regional exchange options, but most of those closed or folded into the effective duopoly of the NYSE and Nasdaq.
Once approved, TXSE will have the task of convincing companies to list on its exchange. According to Fortune, Texas is tied with New York for the second-most Fortune 500 companies headquartered in a state at 52. For the first time since 2014, California came out on top with 57.
Especially in recent years, Texas tried to entice more financial business to the state, whether it is companies moving headquarters there or reincorporating.
This year, Texas will launch a new business court system to challenge Delaware, America’s corporate home for more than a century. And they are doing so with a little public relations help from Elon Musk.
Climate activists try to storm Tesla plant in Germany, clash with police
Climate activists reportedly tried to storm a Tesla plant in Germany on Friday, May 10. Around 800 activists gathered in near the Berlin-Brandenburg Gigafactory in hopes of halting the planned expansion of the facility.
In efforts to expand, Tesla will reportedly have to cut down 250 acres of forest near a nature preserve to build a freight rail depot and storages facility. The company claims the project will make it less reliant on outside providers and prevent part production delays.
Locals voted against the proposed expansion in February. However, the vote was nonbinding and Tesla as well as local officials decided to push forward with the plan.
Protesters had been camped out near the facility since Monday, with crowds growing through Thursday, prompting Tesla to stay home on Friday.
Some activists tried to invade Tesla’s property while sit-in blockades cut off road access for vehicles. There were scuffles with police and protesters trying to flee. Authorities said several people were taken into custody and a few injuries were reported.
Some Tesla vehicles were damaged by vandalism, according to police. Officers reportedly prevented anyone from actually getting inside the facilities.
Elon Musk responded to the protests in a post on X, formerly known as Twitter.
“Why do police let left-wing protesters off so easily?” Musk wrote.
The protests were also against lithium mining in Bolivia and Argentina.
Tesla may have made EV charging harder, even for other car brands
A recent move by Tesla may have made it harder for electric vehicle (EV) drivers to charge their cars, even if they own a model from a different brand. Just weeks after cutting 10% of its global workforce, the automaker announced another round of layoffs. Tesla said it will part ways with with almost the entire team responsible for its Superchargers.
Tesla’s Superchargers are capable of fully charging up a car battery from zero in about an hour. That is a significant improvement over the three to eight hours required by most public EV chargers. The auto company also boasts a larger network of fast chargers in the United States than all other providers combined, making it a crucial player in the EV charging landscape.
Many other automakers planned to utilize Tesla’s Supercharger network for their own EV models. Over 20 different brands expressed intentions to make their vehicles compatible with Superchargers over the next two years. However, the sudden downsizing of the Supercharger division raised questions about the feasibility of those plans.
Elon Musk, CEO of Tesla, said that the company remains committed to expanding its Supercharger network at a slower pace. He said Tesla intends to focus on improving the reliability of existing charger locations rather than rapidly expanding the network.
Executives at other automakers shared their concerns in light of Tesla’s recent layoffs. Rivian, which just started shipping out Supercharger connectors to thousands of customers, was surprised by the news. Ford is also in the middle of making its own connector deliveries. The company warned its EV owners that shipments may be delayed due to “constraints” with the supplier.
The ripple effects of Tesla’s layoffs on the broader EV industry remain uncertain. Other car brands will continue weighing their options and assess the impact on their own charging infrastructure plans.
Musk visits Beijing as Tesla’s China-made cars clear data security hurdles
Tesla CEO Elon Musk unexpectedly visited Beijing, coinciding with the city’s first major auto show in four years. During his visit, Musk met with Chinese Premier Li Qiang. This meeting follows Tesla’s announcement that local Chinese authorities have lifted restrictions on its cars after they passed China’s data security standards.
Tesla, along with several other automakers, has met the new Chinese data security regulations for “connected vehicles,” which include privacy safeguards such as anonymizing facial recognition data collected from their vehicles.
The regulations assess if cars anonymize facial recognition data outside the vehicle, avoid collecting cockpit data by default, process this data internally and clearly inform users about personal data processing. Tesla met these compliance requirements in the first group of automakers.
In a press release, Tesla stated it localized data storage in 2021 at its Shanghai data center and achieved the ISO 27001 international standard for information security, confirmed by third-party auditors.
Elon Musk’s recent visit to China has also heightened anticipation for the upcoming availability of Tesla’s driver-assist software, Full Self-Driving, in the country.
Several dead after tornadoes sweep through Midwest
Several people, including an infant, are dead after tornadoes sweep through the Midwest. Also, demonstrations by dueling groups turn physical on the campus of UCLA. These stories and more highlight The Morning Rundown for Monday, April 29, 2024.
Several dead after tornadoes sweep through Midwest
At least four people, including a young child, are dead after tornadoes swept through Oklahoma on Sunday, April 28 — part of a series of severe weather events affecting several Midwestern states.
On Friday, April 26, a tornado damaged dozens of homes and buildings in suburban Omaha, Nebraska, but no fatalities were reported. Local health officials described the lack of serious injuries as “miraculous.”
Over the weekend, more than 100 tornadoes were reported across six states, including Iowa, where one person critically injured by the storms later died. Less than 36 hours later, EF-3 tornadoes struck Oklahoma, leaving over 20,000 people without power and causing significant damage statewide.
One person died when four semi-trucks overturned on Interstate 35 in Marietta. Another victim was identified as a 4-month-old child. Oklahoma Gov. Kevin Stitt, R, has declared a disaster emergency in response to the extensive damage.
Dueling protests get into physical altercations on UCLA campus
School officials reported that the protests had remained peaceful until a barrier separating the groups was breached, leading to shoving and punching among members of both groups. Campus police armed with batons managed to separate the demonstrators.
The UCLA vice chancellor expressed heartbreak over the violence on campus. The university said it had allowed both groups to protest, some participants were from outside the university.
Blinken visits Saudi Arabia to discuss war in Gaza
On the morning of Monday, April 29, the State Department reported that Blinken met with Saudi Arabia’s foreign minister to discuss ongoing efforts to release hostages held by Hamas and to explore “a pathway to a Palestinian state with security guarantees for Israel.”
Later Monday, Blinken is scheduled to discuss Europe’s role in rebuilding the Gaza Strip with Arab and European leaders. His visit follows President Joe Biden’s phone conversation with Israeli Prime Minister Benjamin Netanyahu on Sunday, April 28, about a potential cease-fire and a warning against an Israeli attack on Gaza City’s Rafah.
Trump holds private meeting with former GOP rival DeSantis
Former President Donald Trump and Florida Gov. Ron DeSantis, R, met privately for breakfast in Miami on Sunday, April 29, to discuss raising funds for Trump’s 2024 presidential campaign.
The meeting, first reported by The Washington Post, was reportedly arranged by real estate chairman Steven Witkoff.
The talks between the presumptive Republican nominee and his one-time rival lasted several hours and were described as “friendly.”
This encounter comes just weeks after NBC News reported DeSantis pledged to donors during a private event that he’ll assist in fundraising efforts for Trump’s campaign.
DeSantis suspended his presidential campaign in January, just days before the New Hampshire primary, and announced he was backing Trump.
Musk visits Beijing as Tesla’s China-made cars clear data security hurdles
Tesla CEO Elon Musk has unexpectedly visited Beijing, coinciding with the city’s first major auto show in four years. During his visit, Musk met with Chinese Premier Li Qiang. This meeting follows Tesla’s announcement that local Chinese authorities have lifted restrictions on its cars after they passed China’s data security standards.
The MLB Players Association stated that the league will modify the Nike uniforms following player complaints about this season’s changes, which included issues with jersey lettering size, mismatched colors and see-through pants.
The uniforms, designed by Nike and manufactured by Fanatics, will be updated by the beginning of the 2025 season, as the memo highlighted the issues as “entirely a Nike issue.”
‘I make sure Tesla is very prosperous’: Musk makes promises amid $2.5B loss
Tesla is navigating a turbulent start to 2024 as it grapples with product defects and financial hurdles, marking its most challenging period since the onset of the pandemic-induced auto industry downturn. However, the company’s CEO Elon Musk still remains optimistic, hinting at the possibility of both new and cheaper Tesla models coming in the near future.
For the first time since 2020, the electric vehicle (EV) maker reported a negative quarterly cash flow, burning through $2.5 billion since the beginning of 2024. With a decline of over 40% in Tesla shares since January, during an earnings call this week, Musk addressed the setbacks his company has encountered.
“We navigated several unforeseen challenges,” Musk said on the call. “As we have seen the EV adoption rate globally is under pressure and a lot of other auto manufacturers are pulling back on EVs.”
Electric vehicle sales growth has slowed so far in 2024, but that has just been the tip of the iceberg for Tesla’s troubles. Ranging from recalling millions of vehicles in China to concerns over safety problems with its Cybertruck’s accelerator pedal shown in viral TikTok videos, the company has had to implement significant layoffs this quarter, letting more than 10% of its global workforce go.
Despite these challenges, Musk indicated he still remains committed to delivering on promises of new Tesla models, particularly more affordable options that the company has been teasing since 2020. Remarks made by the Tesla CEO suggest that a $25,000 model could become a reality potentially before the end of this year.
“We’ve updated our future vehicle lineup to accelerate the launch of new models, so we expect it to be more like the early 2025 — if not late this year — for these new vehicles including more affordable models,” Musk said. “That price is accessible to people, the vast majority of people are living paycheck to paycheck so it is important to keep improving the affordability.”
Investors responded positively to Musk’s announcements, with Tesla’s stock surging by 13% following the news. Musk also unveiled plans to introduce Robotaxis and license out Tesla’s self-driving assistance system.
“I make sure Tesla is very prosperous,” Musk said on the earnings call. “It is prosperous, and it will be very much so in the future.”